WORLD TRADE  
ORGANIZATION  WT/REG162/4 
25 January 2005 
 
 (05-0300) 
Committee on Regional Trade Agreements Original:   English 
  
 
CLOSER ECONOMIC PARTNERSHIP ARRANGEMENT 
BETWEEN CHINA AND HONG KONG, CHINA 
 
SERVICES ASPECTS
 
 
Communication from the Parties  
  The following communication, dated 24 January 2 005, is being circulated at the request of the 
Delegations of China and Hong Kong, China.  
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I. BACKGROUND INFORMATION ON THE ARRANGEMENT 
1. Membership And Dates Of Signature, And Coming Into Effect 
 The Parties to the Mainland and Hong Kong  Closer Economic Partnership Arrangement 
(hereinafter referred to as the “CEPA”) are the Peopl e’s Republic of China (hereinafter referred to as 
the “Mainland”
1) and Hong Kong, China (hereina fter referred to as “Hong Kong”2). The Mainland 
and Hong Kong signed the Main Text and the six An nexes of the CEPA on 29 June and 29 September 
2003 respectively.3 The CEPA came into effect on the day of signature.   
 
 The Mainland and Hong Kong signed the Supplem ent to the Mainland and Hong Kong Closer 
Economic Partnership Arrangement (h ereinafter referred to as the “Supplement to the CEPA”) on 27 
October 2004 on further trade liberalization under the second phase of the CEPA.  The major 
liberalization measures set out in the Supplement to the CEPA took effect on 1 January 2005.  
  The CEPA was notified on 27 December 2003 purs uant to paragraph 7(a) of Article XXIV of 
the GATT 1994 and the Understanding on the Interpreta tion of Article XXIV of the GATT 1994, and 
in accordance with paragraph 7(a) of Article V of the GATS. The Notification of the CEPA can be found in the double symbol document WT/REG162/N1 – S/C/N/264. The text of the CEPA can be found in document WT/REG162/1. The text of the Supplement to the CEPA can be found in 
document WT/REG162/1/Add.1. 
 
2. Type Of Arrangement 
 The CEPA (including the Supplement to the CEPA ) provides for the liberalization of trade in 
services within the meaning of Article V of the GATS.   Article 1 of the CEPA specifically states that 
                                                     
 
1 In the CEPA, "Mainland" refers to the entire cust oms territory of the People's Republic of China. 
2 In the CEPA, "Hong Kong" refers to the Hong Ko ng Special Administrative Re gion of the People's 
Republic of China. 
3 The CEPA (including the Supplement to the CEPA) is signed in the Chinese language, and only the 
Chinese text is authentic. The full texts of the CEPA (including the Supplement to the CEPA) and the English 
translation are available on the following websites: www.mofcom.gov.cn  , www.tid.gov.hk .  WT/REG162/4 
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 the objectives of the CEPA are to strengthen trad e and investment cooperation between the Mainland 
and Hong Kong and to promote joint developm ent of the Mainland and Hong Kong through the 
implementation of, inter alia, progressive liberaliza tion of trade in services through reduction or 
elimination of substantially all discriminatory measures.   3. Scope 
 The liberalization measures of trade in services ar e set out in Annex 4 to the CEPA.   There is 
no a priori  exclusion of any service sector or mode of supply under the CEPA.  Article 3 of the CEPA 
provides that the Mainland and Hong Kong will broade n and enrich the content of the CEPA through 
continuous and further reciprocal liberalization betw een them. Article 11.2 of the CEPA further states 
that at the request of either side, the two sides may, through consultation, pursue further liberalization 
of trade in services between them.      The CEPA contains separate sections on financ ial cooperation, cooperation in tourism as well 
as mutual recognition of prof essional qualifications [Articles 13-15 of the CEPA].  
 
 The CEPA also covers trade in goods.  The asp ects of the CEPA related to trade in goods are 
notified in a separate document (WT/REG162/3).  In  addition, the CEPA contains provisions on trade 
and investment facilitation in its Chapter 5 and Annex 6.    The Supplement to the CEPA  aims to further lib eralize trade in goods and trade in services in 
the Mainland for Hong Kong.  It comprises three anne xes, namely, the list of additional products that 
are given zero tariff preference, the rules of or igin for these products, and further liberalization 
measures on trade in services.  Consequently, Supp lement to the CEPA contains supplements and 
amendments to Annexes 1, 2, 4 and 5 to the CEPA . In this Communication, references to the CEPA 
or any of its Annexes include, where the context permits, references to their respective supplements 
and amendments as set out in the Supplement to the CEPA. 
 
4. Economic And Trade Data  
 Both the Mainland and Hong Kong are still de veloping the methodology for collecting data 
on services trade.  The relevant statistics on trad e in services between the Mainland and Hong Kong 
will be submitted as soon as available. 
 
 
II. PROVISIONS AFFECTING TRADE IN SERVICES 
1. Provisions Of The Arrangement Relating  To The Elimination Of Article XVII 
Inconsistent Measures 
 As stipulated in Article 1.2 of the CEPA, one  of the objectives of the Arrangement is to 
progressively achieve liberalization of trade in services through reduction or elimination of 
substantially all discriminatory measures betwee n the Mainland and Hong Kong.  Annex 4 to the 
CEPA sets out accordingly the timetable and cont ent in accordance with which the two sides will 
reduce or eliminate existing restrictive measures ag ainst services and service suppliers of the other 
side.  Specifically, Article 5 of Annex 4 pr ovides that Hong Kong will not impose any new 
discriminatory measures on Mainland’s services a nd services suppliers in those service sectors 
covered under the CEPA (including the Supplemen t to the CEPA), whereas the Mainland provides 
preferential treatment for Hong Kong services and serv ice suppliers by removing or eliminating the 
restrictions in the service sectors as set out in An nex 4 to the CEPA (including the services sectors as 
set out in Annex 3 of the Supplement to the CEPA). 
  WT/REG162/4 
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  1.1. Treatment Of Services And Service Suppliers From Third Countries 
  Service suppliers of other WTO Members that are juridical persons established under the laws 
of one side will be entitled to the same treatments granted to its own service suppliers by the other 
side under the CEPA, provided that they are engage d in substantive business operations as stipulated 
in Annex 5 to the CEPA (including any relevant  supplements and amendments as set out in the 
Supplement to the CEPA) in the area of the fo rmer side [Article 12.2 of the CEPA].  
 
2. Rules Of Origin 
 Annex 5 to the CEPA (including any relevant supplements and amendments as set out in the 
Supplement to the CEPA) sets out the definition and related provisions on service suppliers in which 
“service supplier” refers to any person th at supplies a service. In this context: 
 
(i) “person” means either a natura l person or a juridical person; 
(ii) “natural person”: 
(a) in the case of the Mainland, means its citizen; 
    (b) in the case of Hong Kong, means its permanent resident;  
(iii) “juridical person” means any legal entity duly constituted or otherwise 
organized under the applicable laws of the Mainland or Hong Kong, whether 
for profit or otherwise, and whether privately-owned or governmentally-
owned, including any corporation, trus t, partnership, joint venture, sole 
proprietorship or association (business association). 
3. Standards/Recognition 
 The two sides will encourage mutual recogn ition of professional qualifications and promote 
the exchange of professional talents between each  other. Competent authorities and professional 
bodies of both sides will, in consultation with each  other, consider and design specific methodologies 
for mutual recognition of professional qualif ications [Article 15 of the CEPA]. 
  Discussion in some sectors have begun and, so far, the two sides signed a reciprocity agreement for estate surveyors in Hong Kong and r eal appraisers in the Mainland, an arrangement 
relating to qualifications of securities and futu res industry practitioners, a mutual recognition 
agreement for architects, an agreement on measure s to facilitate Hong Kong residents to take the 
Mainland Insurance Practitioners Qualifying Exam inations, a mutual recognition agreement for 
structural engineer, and an arrangement for the exemption of professional examination in the accounting sector. 
 
4. Safeguards 
 The CEPA does not contain any specific provision s on safeguards relating to trade in services. 
 
5. Subsidies And State-Aid 
 The CEPA does not contain any specific provisions on subsidies or state-aid relating to trade 
in services. 
 WT/REG162/4 
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 6. Government Procurement 
 The CEPA does not contain any specific provisions on government procurement. 
 
7. Sector-Specific Provisions 
 Articles 13 and 14 of the CEPA provide for respectively financial cooperation and 
cooperation in tourism between the two sides in a ddition to the liberalization measures specifically 
provided for in Annex 4 to the CEPA.   
III. GENERAL PROVISIONS OF THE ARRANGEMENT 
 Please refer to Section III of WT/REG162/3. 
  
IV. OTHER 
 Please refer to Section IV of WT/REG162/3. 
 
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